Justice Dept. investigating some JDC operations

NEW YORK (JTA) — The U.S. Department of Justice is investigating some aspects of the international operations of the American Jewish Joint Distribution Committee.

The JDC, one of the two international arms of the North American Jewish federation system charged with social welfare of Jews and with Jewish community building outside of North America, disciplined two employees in the spring of 2010 for what the organization termed "an inappropriate financial transaction."

That disciplinary action stemmed from a report that in 2006, four JDC employees in its Former Soviet Union Department were involved in an inappropriate financial transaction of under $30,000 in a court case in Moldova. The two employees were disciplined and warned that a repeat of their behavior would lead to dismissal.

Two other employees were involved, but they no longer work for JDC, the organization’s CEO, Steven Schwager, told JTA at the time.

The current investigation by the Department of Justice is “in part” related to the incident in Moldova, according to a statement JDC sent its board members Feb. 3.

The Justice Department "is reviewing certain aspects of JDC’s international operations, including whether individuals associated with JDC may have interacted improperly with various government officials in certain eastern European countries,” the statement said.

The organization has instructed its employees and board members not to discuss the matter with the media.

“The American Jewish Joint Distribution Committee has been informed by the Department of Justice that they are interested in reviewing JDC’s interactions with various government officials in certain eastern European countries,” a spokesman for the organization told JTA in an e-mailed statement. “JDC understands that this investigation relates in part to a matter previously reviewed by JDC.”

The JDC’s audit committee is cooperating fully with the Department of Justice, the spokesman said. The organization has retained the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP to “undertake a new, independent and thorough review,” as well as a public relations firm to handle the matter.

“JDC seeks to uphold the highest standards of transparency, accountability and ethical practices in the more than 70 countries in which it operates," the statement said. "It is committed to advancing JDC’s mission with integrity and in compliance with the law. Due to the ongoing investigation, it is not appropriate for JDC to comment further at this time.”